If Product A & B are identical, what could cause Product A to sell 5x more than Product B?
I love button up short sleeve shirts, I usually buy them at $15-$30. I came across one I loved, but it costs a whopping $85! How can one mimic their bold pricing positioning to become a premium brand vs. a mid-range brand?
Randy Tucker, Startup Founder, answered:
Purchase decisions are made based on presentation and then need. The same products presented in different methods will sell drastically different. Think about this, shirt A & B are identical, Shirt A is presented in a comfortable nice store with a well dressed sales person and Shirt B is neatly folded and laid out in a street vendors trunk. At the same price, shirt A will sell better. The only difference, presentation. This too is the reason a great web store design is needed in the online world.
Richard Taylor, Founder & CMO at Factori, answered:
Your branding & positioning needs to be built around your true differentiators. Generally those are one of three things (i) price; you supply the same product/service as the competition but at a better price, or with a better structured payment plan (ii) quality of service; you supply a better service at the same price, or at a justifiably higher price (iii) innovation; you supply something different – a service with a unique dimension to it.
You also have the potential to develop some ‘luxury’ effect (and I use that word in the strict Economists definition where an upward sloping demand curve is in effect) – that is by pricing yourself higher you create the perception that your product/service is in some way better or unique and increase demand. There is no easy way to do that – you just need first class marketing, service, support and patience.
Marco Rezende, Brand Identity Consultant, answered:
In order to be recognized as a premium brand, you need to offer and deliver a premium quality that stands the reality test. If your product is premium, as you promises, just design a consistent and premium quality in all, all aspects. Create the premium aura. Be consistent over the time. Engage your people on a premium internal culture and behavior. Engage your client with a premium identity. Create the same psychic atmosphere that you live when you are in a luxury goods store.
There is no simple ways. There is ways to be successful. Build a premium way.
Eran Eyal, Co-founder // COO at Passo, answered:
If you can show hard data that you are quicker and better than the competition, you can charge more. Initially you do sweetheart deals, for sure – but once you have customers and data, don’t fall into the classic pitfall that you feel you need to charge the same or less. Segment your offering into product market fit: The right product for the right customer. That can allow you to scale your costing.
I always enjoy “supersize me” options. You offer the “standard” package and show comparative benefits vs the competition. This places you as premium in the mind of the consumer, but no-one wants a “standard” package – or at least not for very long. Show them premium and enterprise/ diamond packages with significant benefits and as long as you’re known for your excellence, the right customers will open their pockets. Transparency of data is what it’s all about. Show the benefit. Show the delta.
Do you have some of your own expert insight to add? See more startup expert answers on how to differentiate and evolve your company into a premium brand.
Curious to know how the experts would weigh in on your own entrepreneurial dilemma?
Log in to Clarity and explore the Answers forum for yourself!
Access 20,000+ Startup Experts, 650+ masterclass videos, 1,000+ in-depth guides, and all the software tools you need to launch and grow quickly.
Already a member? Sign in